Wall Street’s New Weapon or Main Street Strikes Back?

Let’s posit that many Americans feel the banking industry has quite a lot of influence already. And several choice quotes in a column in the American Banker last week from advisers to the new group, Friends of Traditional Banking, did nothing to dispel that image:

“It comes back to the old philosophy of walking softly and carrying a big stick,” Howard Headlee, the president and chief executive officer of the Utah Bankers Association, told the paper. “But we’ve got no big stick. And we should. We have the capacity to have one, we just aren’t organized.”

And Roger Beverage, president and CEO of the Oklahoma Bankers Association, fretted that “Congress isn’t afraid of bankers…They don’t think we’ll do anything to kick them out of office. We are trying to change that perception.”

But a close look at the people associated with Friends of Traditional Banking reveals a more nuanced picture. Instead of being just another tentacle of Wall Street, the group might be a sign of an intramural fight amongst bankers — Wall Street versus Main Street.

Not all bankers are built the same way, and those affiliated with the new super PAC aren’t particularly cozy with Wall Street. They’re more the small-town, Main Street variety, and they aren’t regulated the same way, nor do they have the same kind of access to Washington power circles, as their much bigger siblings.

JPMorgan Chase has about $1.1 trillion in deposits. Central Bank, of Provo, Utah, which is run by Matt Packard, the chairman of the new super PAC, has deposits of about $508 million. Packard and Jamie Dimon, the chairman of JPMorgan Chase, aren’t in the same league, or arguably the same game.

It’s often true that what helps big banks helps all banks, and there are some very large banks with very deep pockets who aren’t afraid to spend to win Washington’s favor – such institutions as JPMorgan Chase and Bank of America. And one very large business association represents the banking industry as a whole, the American Bankers Association, which has its own PAC (BANKPAC). This is truly a big money confederation — we classify it as a heavy hitter. In 2011, the ABA spent $8.8 million lobbying, and BANKPAC has already given $1.1 million to candidates this election cycle, overwhelmingly Republican.

Banks like Packard’s have found their voice in Washington with the Independent Community Bankers of America, which spent $3.3 million on lobbying last year — less than half what the ABA spent, but still a hefty chunk of change.

The large and small bankers agree on many issues, but a look at how both groups distribute their campaign cash highlights some key differences. The ABA has given significantly more to Republicans for a very long time – 1994 was the last election cycle in which it gave more to Democrats. The ICBA has not only given far less, it has frequently given more to Democrats, sometimes far more.

During the 2010 election cycle, as the financial reform bill was working its way through Congress and Republican candidates were preparing to sweep into Congress, the ICBA backed House Democrats, giving them $410,250, while House Republican candidates received only $297,750. Meanwhile, the ABA bet heavily on Republicans, giving them $1.5 million (more than all of the ICBA’s contributions combined), while Democrats got less than half of that, $786,000.

In some races, such as the one for Pennsylvania’s 11th District, the two groups went head-to-head. The ICBA backed incumbent Democrat Paul Kanjorski, a member of the House Financial Services committee that wrote the Dodd-Frank financial reform bill, giving him $10,000, while the ABA backed the Republican challenger, Lou Barletta, with $6,000. Barletta won.

The two organizations split over the various reforms in the Dodd-Frank bill. Small banks — those with less than $10 billion in assets — are treated differently under the new law, with less supervision from the new Consumer Protection Financial Bureau.

As reported by American Banker, the new super PAC is being advised by a coalition of ten state-based banking associations, which, according to OpenSecrets.org data, have participated in federal lobbying and campaign fundraising only to collect money from local banks and funnel it to BANKPac. Despite this, the ABA doesn’t seem to have the same level of enthusiasm for the new super PAC that the ICBA does.

When American Banker asked BANKPAC treasurer Gary Fields if he’s excited about the prospects for Friends of Traditional Banking, he responded, “I’m more excited about the ABA BankPAC… What we would like to see is more bankers participate in the PAC.”

Fields told American Banker his group planned to unveil something called the “Chairman’s Club” as a complement to the Friends of Traditional Banking super PAC. It wasn’t clear if this would be a super PAC as well.

To see more details on nine of the ten state-based banking associations behind the new super PAC, and their own donors, follow the links (the Vermont Banker’s Association has not been active on the federal level since 2000):

Russ joined the Center in March 2012 as the money-in-politics reporter. His duties include reporting for OpenSecrets Blog and assisting with press inquiries. Russ has a background in investigative journalism, having worked as a reporter for the Investigative Reporting Workshop at American University, and he spent five years as a newspaper reporter in New Hampshire. He has a degree in political science from Muhlenberg College and a M.A. in journalism and public affairs from American University.

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